Image source: The Motley Fool.
Avalara, Inc. (AVLR)
Q4Â 2019 Earnings Call
Feb 12, 2020, 5:00 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Ladies and gentlemen, thank you for standing by, and welcome to Avalara's Fourth Quarter and Fiscal Year 2019 Earnings Conference Call. [Operator Instructions]After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions].
I would now like to hand the conference over to your speaker today, Greg McDowell, Investor Relations. Thank you. Please go ahead, sir.
Greg McDowell -- Investor Relations
Good afternoon, and welcome to Avalara's fourth quarter and fiscal year 2019 earnings call. We will be discussing the results announced in our press release issued after market close today.
With me are Avalara's CEO, Scott McFarlane; CFO, Bill Ingram; and Executive Vice President of Strategic Initiatives, Ross Tennenbaum.
Today's call will contain forward-looking statements, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning financial and business trends, our expected future business and financial performance and financial condition and our guidance for the first quarter and fiscal year. And can be identified by words such as expect, anticipate, intend, plan, believe, seek or will. These statements reflect our views as of today only, should not be relied upon as representing our views at any subsequent date and we do not undertake any duty to update these statements.
Forward-looking statements by their nature address matters that are subject to risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the material risks and other important factors that could affect our actual results, please refer to the risks discussed in today's press release, our annual report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2019 and our other periodic filings with the SEC.
During the call, we will also discuss non-GAAP financial measures, which are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of the GAAP and non-GAAP results is included in our earnings press release, which has been filed with the SEC and is also available on our website at investor.avalara.com.
With that, let me turn the call over to Scott.
Scott McFarlane -- Chief Executive Officer
Thanks, Greg, and welcome to everyone joining our Q4 2019 earnings call. Q4 was another strong quarter for Avalara, capping off an amazing year. In Q4, we reported total revenue of $107.6 million, representing an increase of 40% over the same quarter last year. Our growth rate was driven by continued strong execution across the business. We saw new customer wins across a wide range of industries, segments and geographies, and we experienced strong customer retention and solid upsell activity.
I would like to thank all of our customers and partners, who contributed to our success in 2019. And I would like to thank our employees for their hard work, their continued commitment to our customers, our vision and each other is greatly appreciated. We recently had a chance to celebrate our success and hard work at our All-Hands Company Meeting. It was amazing to see the involvement, excitement and enthusiasm of all of our employees at this annual event.
The highlight of our meeting this year was the introduction of our new Five-Year Vision Document. The fourth we've written at Avalara. Before I share some of the key aspects of our vision with you, I would like to outline how we got here. We all live in a digital world that's rised because of automation. We see it every day in our personal lives and we see it in our work lives as well. Many of the once-manual repeatable business requirements have been automated, such as sales force management, enterprise resource planning, inventory management, account receivable, payments and fulfillment among others, but there are laggards.
As you know, governments worldwide deploy our businesses to collect and remit taxes and the state governments impose a complicated and endless evolving array of compliance obligations, and the bulk of the processes surrounding global compliance are still manual for most businesses. This is where Avalara steps in. We exist to ease the confounding government-mandated burden, every business on the planet must face the obligations of transaction tax and regulatory compliance. It is our core belief that compliance should not and will not remain a manual process. We believe it should and will be automated. We believe compliance automation is inevitable, and to think otherwise, it's simply irrational. This brings me back to our vision for Avalara and how it has evolved.
As said before that we want to be part of every transaction in the world. This is as true today as it was over a decade ago when we first articulated it. But what's exciting to me is, how that vision has grown to encompass an even broader view of the compliance challenge. When we started Avalara more than 15 years ago, our only service was tax calculation. So naturally, our grand vision was very focused on transactions. Today, Avalara is an end-to-end compliance provider, having added robust automated returns and remittance services, exemption certificate and other document collection, storage and management solutions, licensing and registration services, cross-border compliance and more.
So for some time now, hardly enough, just seeking to be part of every transaction on the planet wasn't really big enough to capture everything we do. What about the returns we file for customers, payments we make on their behalf, compliance documents we manage and so forth. We undertook a lengthy and thorough process to frame our updated vision and the key principles required to pursue it. And we now take our long-range claim to becoming the global cloud compliance platform and to automate all aspects of compliance for global businesses. Through this process, we also reconfirm our commitment to meeting our promises to our customers and clarify that while growth remains our prime directive, driving efficiencies in our business is also an imperative.
During 2019, we focused on improving sales and marketing efficiency and on driving the business toward cash flow breakeven. I'm proud of the continuing results we achieved from those efforts and excited about the emphasis we are placing on improving our margins in the long-term. Efficiency initiatives sets every element of our business today from customer and partner on-boarding, the self service support initiatives, to the continued application of advanced technologies to manual parts of the compliance journey.
These investments have a profound and exciting impact on our business. So we believe they remain in early days of value creation for Avalara. A good example is the application of artificial intelligence, a machine learning technology that we acquired from Indix last year. As you may recall, one of the primary initial projects we asked the team to explore was using AI to accelerate the acquisition of new content and the mapping of a massive database of global product post the tax coding.
We are excited to share amazing progress by the team in this area. We can now source sales and use tax rates for most states at the click of a button. In addition, we have delivered automation tools that assist with cross-border product classification. Our content team, a dedicated group of tax and compliance experts that Avalara relies on to maintain and expand our extensive content database can now use these automation tools to work more efficiently, leaving time to assemble new content.
As a reminder, new tax and compliance content unlocks new markets for Avalara, expanding our potential customer and partner base with each new vertical, geographic or tax type added to our global database. If I take a minute to articulate the difficulty of the content acquisition and maintenance stats, I want to share some of the stats around the changes made to our US database last year. These changes are based on ever-changing laws and regulations that govern state and local taxes and the rate of change can be busy.
In 2019, we made almost 300,000 updates to our AvaTax calculation engine. These changes include everything from rate updates, the taxability rule changes, boundary amendments, tax holidays and more. Imagine, trying to keep up with all that in the accounting office of a small or medium-sized business or even a large accounting firm. I'm excited that our technology investments not only drive major efficiencies in our internal processes, but also show up as big usability improvements for our customers, existing and new.
We are in the final testing of automatic AvaTax code classifications and automated taxability analysis to accelerate new customer on-boarding. The process of mapping a customer's product portfolio and the SKUs to tax codes can be labor-intensive. And our new system will substantially ease the burden for new customers. We are also updating our tax rate lookup tool with an AI-powered back end and better search technology.
Finally, and before I close my comments today, allow me to touch briefly on our talent today at Avalara. Last year, we brought in an astounding caliber of new leadership to the organization. I want to recognize two of our most recent hires who have joined the team. Jay Lee joined Avalara as Chief Marketing Officer in November, coming to the team from prior marketing leadership roles at PayPal, American Express and GE. And last month, Salim Ali joined Avalara as SVP of International. Prior to Avalara, Salim was CEO of Loyakk, an enterprise data sharing platform built on blockchain technology, and has overseen global marketing, product and partnership efforts for notable enterprise technology companies, including SAP and Veritas Technologies.
With that, allow me to close this section with what I'm sure many of you are waiting for. I'm about to hand this earnings call over to my partner, Bill Ingram for the last time. It has been a great honor of my career to work alongside Bill for the past several years. And I could not be more grateful for his willingness and enthusiasm to join our company. I can confidently say that we would not be where we are today without his leadership and skill. I believe we've been led by one of the best CFOs in the business.
As a testament to that, I believe his transition plan was one of his final stellar strategy and Ross Tennenbaum is the best choice to following his footsteps. Ross has worked with Avalara since 2014 when he began helping us prep for our IPO. In his Managing Director role at Goldman Sachs, Ross led the team that managed our IPO. Ross's experience was built over a 10 year investment banking career at Goldman Sachs and Credit Suisse, and nearly seven years in leadership roles at VIACK Corporation, a web collaboration software company.
Since arriving at Avalara last year, Ross has led our Strategic Initiatives Group, including our cross-border, lodging, communications, and excise businesses, which represents strategic growth areas for our business. They will deliver our financial update side-by-side today. And I trust that folks on the phone will enjoy working with Ross in the years to come.
With that, over to you, Bill.
Bill Ingram -- Chief Financial Officer
Thanks, Scott. As a reminder, Avalara adopted the new revenue recognition accounting standard, ASC 606 effective January 1st 2019 on a modified retrospective basis. As a result, financial results during 2019 are presented in compliance with ASC 606, while historical financial results prior to 2019 are presented in conformity with ASC 605. Our earnings press release includes additional information to reconcile the impacts of the adoption of the ASC 606 standard.
Our fourth quarter and fiscal year 2019 results were highlighted by strong sales execution and continued market demand. For the year, our total revenue under ASC 606 grew 41% to $382.4 million. For the fourth quarter, total revenue was $107.6 million, up 40% on a year-over-year basis. The strong growth in the quarter was once again driven by increased demand from both new and existing customers, combined with strong sales execution across channels.
Subscription and returns revenue was $99.9 million, this represented 93% of our total revenue and it grew 39% year-over-year. Professional services revenue was $7.7 million. Our core customer count increased by 720 to approximately 11,960 at the end of Q4 2019. Our net revenue retention rate was 111% in Q4 and has averaged 111% over the last four quarters. Our revenue retention rate supported by low gross churn contributes to strong customer lifetime value.
In discussing the remainder of the income statement, please note that unless otherwise stated, all references to our expenses, operating results and share count are on a non-GAAP basis and are reconciled to our GAAP results in the earnings press release that was issued just before this call. Gross profit was $76.8 million for Q4 '19, representing a 71% gross margin. This compares with gross profit of $56.2 million and a 73% gross margin in the same period last year. The two percentage point decline in gross margin primarily results from third-party software hosting costs and our expansion into international markets as we have discussed in prior quarters.
Turning to operating expenses, we continue to invest in sales and marketing to fuel long-term growth and new customer acquisition. Sales and marketing expense was $43.4 million in Q4 or 40% of revenue. On a 605 basis, sales and marketing expense would have been $49.3 million or 46% of revenue. Our sales and marketing expense was up on a sequential basis, this was in line with our expectations and due mainly to seasonality. We are pleased with our continued sales and marketing efficiency.
For Q4, our research and development expense was $23.7 million or 22% of revenue. The increase in research and development expense was consistent with our expectations as we continue to invest in new products, content and features to drive sales growth efficiency and increase our competitive moat. For Q4, general and administrative expense was $14.8 million or 14% of revenue. The decrease from the prior quarter in general and administrative expense was driven primarily by an insurance litigation recovery which was recognized during the quarter.
Non-GAAP operating loss was $5.1 million for Q4, which was better than our previous guidance due primarily to the revenue upside in the quarter. On a 605 basis, non-GAAP operating loss was $10.9 million, compared to $13.3 million non-GAAP operating loss in Q4 '18. Non-GAAP loss per share was $0.03 in the fourth quarter based on 77.1 million shares outstanding. On a 605 basis, non-GAAP loss per share was $0.10, compared to a loss of $0.19 per share in the fourth quarter of 2018 based on 66.7 million shares outstanding.
In preparing our 2019 annual financial statements, we discovered an immaterial error in recording deferred sales commissions for the first three quarters of 2019, impacting our previously reported ASC 606 financial results. On the last page of the financial schedule, we have presented for each of the first three quarters of 2019 our unaudited consolidated statements of operations as previously reported and as corrected. The correction resulted in additional sales and marketing expenses of approximately $1 million for each of the first three quarters of 2019 under ASC 606. There is no change to our previously reported ASC 605 financial results.
Looking now at our fiscal year 2019 results, total revenue of $382.4 million was up 41% on a year-over-year basis. Subscription and returns revenue contributed $355.2 million, this represented 93% of our total revenue and it grew 40% year-over-year. Professional services and other revenue contributed $27.2 million. Non-GAAP gross profit was $275.1 million for 2019, representing a 72% gross margin. This compares with gross profit of $199.1 million and a 73% gross margin in 2018.
The same factors discussed earlier which impacted our Q4 gross margin also contributed to the gross margin results for the full-year. Non-GAAP operating loss for 2019 was $14.4 million, compared with a $45 million loss in the prior year. Of note, $18.6 million of the year-over-year improvement in operating loss was due to the adoption of ASC 606. The results are consistent with our expectations as we continue to invest in our business to drive long-term growth and new customer acquisition.
Turning to our balance sheet and cash flow statement. Our cash and cash equivalents were $467 million at the end of Q4 '19, an increase of $20.4 million from $446.6 million at the end of Q3 '19. Total deferred revenue as of Q4 '19 under ASC 606 was $161.2 million, up 9% from $148.5 million at the end of Q3 '19. Calculated billings is a non-GAAP metric that takes into consideration revenue and the change in deferred revenue, as well as the change in contract liabilities.
Calculated billings were $120.8 million in Q4 '19, up 29% from $93.4 million in the same period last year. As a reminder, our calculated billings growth rate began increasing meaningfully in late 2018. We will continue to face challenging year-over-year comparisons relative to this trend throughout fiscal year 2020. Free cash flow was $14 million for the quarter, compared to $4.5 million in the same quarter last year. As we have stated on past calls, our free cash flow will fluctuate from quarter-to-quarter, caused by many factors, including the timing of working capital, the seasonality of our billing and expense cycles, as well as our overall level of investment in the business.
As we previously announced, I will be retiring on March 31st and have joined our Board of Directors. Ross Tennenbaum, our Executive Vice President of Strategic Initiatives will take over the role of Chief Financial Officer. Ross's experience was built over a 10-year investment banking career at Goldman Sachs and Credit Suisse, including working with Avalara since 2014 and leading its IPO in 2018. Scott and I have great confidence in Ross and we are very fortunate to have him step into the role of Chief Financial Officer.
In addition, I want to thank our team for the strong financial operations we have built at Avalara. I firmly believe the company is well positioned for the future.
With that, let me turn the call over to Ross.
Ross Tennenbaum -- Executive Vice President of Strategic Initiatives
Thanks, Bill. On behalf of Avalara, I would like to thank Bill for his leadership as Chief Financial Officer over the last four years. Bill has build a strong team and foundation that has scaled our financial operations to support an initial public offering and high growth. Bill has been a great mentor to many Avalarians and I'm grateful that he has joined our Board of Directors and will remain engaged and accessible as a long-term trusted advisor to me and our entire team.
I joined Avalara almost one year ago after serving as an investment banking advisor to Scott, Bill and the company for nearly six years. Through these experiences, I've had the opportunity to immerse myself deeply in the business and work alongside Bill on the finance team to drive operations. I'm excited to assume the Chief Financial Officer position to help the company achieve its long-term ambition.
I will now conclude the call by providing guidance on revenue and non-GAAP operating loss for Q1 and for the full-year of 2020 under the ASC 606 standard. As a reminder, after a strong 2019 performance, highlighted by 41% revenue growth, we expect to face more challenging year-over-year comparisons in 2020. For Q1 2020, we expect total revenue to be between $107.5 million and $108.5 million. We expect our Q1 non-GAAP operating loss to be in the range of $8.5 million to $9.5 million.
For the full-year 2020, we expect total revenue to be between $470 million and $474 million. We expect our full-year non-GAAP operating loss to be in the range of $18 million to $22 million. We continue to expect a modest level of cash burn in 2020, consistent with what we shared on our November 2019 earnings call. We believe the momentum in our business, compelling customer economics and our leadership position in a large market, all support continued investment in the business to drive long-term growth.
Before closing, please note that our Investor and Analyst Day will be held on Wednesday, May 13th in St. Louis in conjunction with our CRUSH Annual Users Conference. In-person attendance will be limited, so if you're interested, please contact our Investor Relations team. For those of you who cannot join us in person, a webcast of the event will be accessible on our IR website.
At this point, we'd like to open up the call for your questions.
Questions and Answers:
Operator
Thank you. [Operator Instructions] Your first question comes from Chris Merwin from Goldman Sachs. Your line is open.
Christopher Merwin -- Goldman Sachs -- Analyst
Okay. Thanks so much and congratulations on a great end of the year. Scott, in your prepared remarks you talked a bit about the progress Indix has been making in -- at aggregating tax content. Can you update us on any content gaps you might still have in certain verticals, how you're thinking about closing those gaps either organically or through M&A? And how that could potentially open up, I guess, the opportunity for more customer additions in time? Thanks.
Scott McFarlane -- Chief Executive Officer
Yeah. Thanks, Chris. We've said on calls in -- previously that we have about -- I would say, we have some place around 60% of the content of US. Now some of that content doesn't really -- there is not a big market for it. So, we've got the majority of the big -- the big areas, but there is a lot of work that we can do around food and beverage, automotive, manufacturing. Those are the things that we're going to pick up once -- as I said in my remarks, once the Indix kicks in and we're starting to do maintenance on an automated basis. All of our teams can start focusing on that effort going forward. And I think that that's a big change for us. One, I think it will have gross margin impact for us in the future, but it will also allow us to add growth, that's exactly the kind of initiative that we want to work on, ones that have -- work on efficiency and growth simultaneously. So, I'm pretty optimistic about that.
Christopher Merwin -- Goldman Sachs -- Analyst
Okay, great. Thank you. And maybe just one quick follow-up, the full-year margin guidance, it looks like it implies a little bit of deleveraging the model. And I realized fiscal '20 was a year of accelerated growth for you all that probably came in well ahead of the original plan. So, maybe can you just talk about where you're investing in '20? And, I guess, to the extent that you do see some over delivery, should we be thinking about that flowing through to bottom line? Or do you see kind of continued -- continued opportunities to reinvest that in growth? Thanks.
Bill Ingram -- Chief Financial Officer
Thanks, Chris. Yeah. This is Bill. We're very pleased with the profile of our income statement. We're going to continue to invest across where we see the ability to drive growth. And as Scott said, long-term improvements in margin. And so, we've done a number of investments this year that I'm very pleased with. We've invested in the capacity of our network and the security of our network. We've invested in content, product development, product marketing, product management, and then we've also invested in other areas along our sales and marketing and our general administrative. We're really putting in the foundation building blocks to build a much bigger company here.
And so, Scott and Ross and I, we clearly have our eyes keenly on the income statement, all the levers we can pull, but I don't think the deleveraging that you pointed out is anything to be overly concerned about as we're prudently making investments really to broaden the total served market kind of like what you talked about earlier and also start to deliver some efficiencies across the income statement. The biggest concern we had coming out of the IPO year and a half ago was our sales and marketing efficiency and we've done a nice job demonstrating that, now we're taking the content, the capacity, the scalability, the security of our network and core infrastructure into a great place also. So, we think we've got the right -- great mixture here, Chris. Thanks.
Christopher Merwin -- Goldman Sachs -- Analyst
Thanks, Bill.
Operator
Your next question comes from Sterling Auty from JP Morgan. Your line is open.
Sterling Auty -- JP Morgan -- Analyst
Yeah. Thanks. Hi, guys. So you added over 700 customers again in the fourth quarter. Can you help us understand what are the profile of the customers that you're adding today versus, let's say, a year ago? And what I mean by profile, how would you characterize, are these larger companies, smaller and even mix? What is the focus of those customers? And what's kind of the tip of the spear? Is it always tax calc that's bringing them in? Or is there kind of another tip of the spear that you're starting to see develop?
Bill Ingram -- Chief Financial Officer
Thanks, Sterling. This is Bill. I'll start and others can jump in and add to kind of cover this. That's a good question. So first of all, I just want to remind everybody, the core customer count we report is not purely new net adds. It's -- it's our -- it's our metric of those customers that have generated more than $3,000 of revenue in the last 12 months. And so, it's a very nice metric, we like it, because it's very predictable. But to your point, we are seeing on margin newer customers slightly larger than we've seen a year ago, that was your premise, compare a year ago to now.
So the first comment I make would be, the average customer size is larger and it's not just the entry point of tax calc. I know, as Scott even said few minutes ago, that's where we started the company, but we really have multiple entry points for our business not just tax calc, but also returns, compliance and a couple of other, cross-border now and certain verticals that our expertise comes through. So the other thing I was going to make on your point about core customer count, it don't, again, overemphasize the last decimal, the growth rate or the numbers. If you remember, last quarter, I reported -- we reported 80 of those core customers came inorganically from our Compli acquisition.
And so, again, the nice thing about the core customer count is, it still represents -- that cohort represents more than 80% of our revenue currently, and the average selling price is increasing on the margin, but it's a nice solid base as you see now over 11,000, which grows at a very steady basis. And that brings me back to my tag line, which is, we like the business here because it's a large TAM, it's got low churn and we see real strong steady stable growth for many, many years. Scott?
Scott McFarlane -- Chief Executive Officer
Let me add just a little bit of color to that, right. I mean, I think I said it in my opening remarks a little bit, which is, we're doing a lot of broader [Phonetic] things other than just the tax calculation that we did. And I always say that there is the four horseman of sales -- of tax, right? Which is, I mean, you have one or all of these problems. I mean, you have a calculation problem, you have a returns filing problem, you have an exemption -- you have a exemption certificate issue, right? Those -- or you have a use tax problem. Those are the ways. And so Avalara has really tried to work to build out our product offering, so wherever your problem is you have an entry point into Avalara. Now we've added cross-border and then, of course, you have VAT as well. So, we really have seven ways that customers feel pain that can -- that can come into our business and we want to make it easy for them to do that.
Sterling Auty -- JP Morgan -- Analyst
That makes sense. And then one follow-up on the investment in the margin outlook. Can you give us a sense, how much of this is actual just people, in other words, headcount increase? How much of it is other investment, like the infrastructure in terms of cloud and to support international? And maybe to help us with that, can you give us a sense, what was the headcount at the end of the year and directionally where do we see that going?
Bill Ingram -- Chief Financial Officer
Thanks, Sterling. It's Bill. We don't break out headcount at the end of the year, but what I can tell you is, we have absolutely grown headcount in the company. Scott talked about new leadership we brought in. And I got to tell you in the four plus years I've been here, the company has really matured and attracted some great people to join us. So I'm very pleased with the profile of the workforce.
In terms of the investment, we don't have it broken out in terms of percentages, but I would say, for your -- kind of way you phrased questions, kind of 50-50. 50% of the overall investment is in people and talent and training and development. We're doing some great things on the training and development front, but the other 50% really has come from some big systems. I think I've talked about earlier that are kind of a step function in investment for us because we feel very confident about the long-term future of the business. And so just for example, we're putting in a worldwide HR system that's going to -- going to be really very good for the company. I'm having to -- my team overseeing a SOX 404 implementation because of our market cap makes us a large accelerated filer now. So there is just some kind of big company things that we're doing now which I think are very prudent. And so to your question, I'd say, it was kind of 50-50 headcount and systems.
Sterling Auty -- JP Morgan -- Analyst
Thank you.
Operator
Your next question comes from Brad Sills from Bank of America Securities. Your line is open.
Brad Sills -- Bank of America Securities -- Analyst
Oh, great. Hey, guys. Thanks for taking my question. I wanted to ask about international. I know this has been a focus on the content side, where do you feel you are in kind of the build-out of content particularly in Europe and LATAM such that we're getting close to potential investment in go-to-market in those regions to kind of originate more customers in international geographies?
Scott McFarlane -- Chief Executive Officer
Thanks, Brad. I'll take this one. International as we've said is a really sort of big focus for us, I mean, and let's -- let me lay the groundwork for this. When we talk about international, we are talking about businesses that reside outside of the US, but I'll remind everybody that because of the promise of the Internet, anything, anywhere, any place, any time, I mean AvaTax, we have to calculate or maybe prepared to do international rates at the highest level for 210 countries around the world. And in fact, we do over 160 different countries every mean -- it mean, every year or at least in 2019, mean calculating.
So, in order to do really good service and which I think sort of distinguishes Avalara at times is that, you have to be able to calculate that at all. So, I mean our basic businesses is centered around being able to do 210 countries. Now, specifically I think to your question is, we take that -- those -- that high level rates and now we start driving down. So, EMEA and the countries around that, I think we have pretty good -- I mean, pretty good content. We made an acquisition about four years ago and they were the leading group with their content.
So, we've been able to take EMEA and have a pretty good -- have a pretty good base for growing that business. Getting it integrated into AvaTax is what we're doing today, so we can expand that content and send it out even further, and I think use our really good UI and U -- I mean, UX experiences to help more customers. LATAM, we've really started in Brazil. And Brazil, as we all know is the hardest tax regime and we continually build out that -- build out that content. And it's -- that job is never done because it's a lot to update and a lot to continue to grow and we'll continue to do that, but we're moving into -- I mean, Mexico and other regions in that area and we'll grow out LATAM over this year and the coming years.
So those are our two -- our main basis right now, obviously, and we've talked about that with the investments that we -- that we've made -- well, the investments that we got in our secondary and the like that we want to expand that even faster and further beyond. So, I think we have a long ways to go on an international basis, but we've made a -- we've got a good start in two base areas and we'll continue to grow from there.
Brad Sills -- Bank of America Securities -- Analyst
That's great. Thanks, Scott. And then one more if I may please. On the net revenue retention at 111%, is it possible to unpack a little bit what's driving that? Transaction volume growth is obviously key, more states, more geographies, I'm sure, is the secondary driver and then you've got other services like cross-border, landed cost, etc. I guess, where are those, I guess, those three -- how do they rank today versus say a year ago when you look at your net revenue retention, which one would you say is contributing more? And then do you think that this kind of 110-ish level is sustainable? Thank you.
Bill Ingram -- Chief Financial Officer
Sure, sure, Brad. Thanks. Well, as we always say, we encourage you to look at kind of the four-quarter average as opposed to any one quarter. And so 111%, we're pretty pleased with that. A year ago the four-quarter average would have been less than 111%. So I think it's fair to say that it has moved up a few points year-over-year. Again, I'm talking about a four-quarter average, not quarter-to-quarter.
You kind of laid it out, we've talked a lot as you know in the past about Wayfair. Well, Wayfair really is a long-term tailwind for the business that is driving existing and new customers basically to register in more return file in more states, and that contributes for existing customers to the net revenue retention. We've talked in the past I think a little bit about SST revenue, that's with existing customers primarily which picks up a point or two. And then cross-border starting to -- is starting to come into play.
And I think it's fair to say that most companies, not all, but most companies have some early requirement for an international transaction and whether they're using us or not today, we think that's really again a steady kind of long tailwind for us. So you kind of -- you kind of answered the question as you asked it. I can't add much more to what you said, but those things are driving and have picked up a few points for us in net revenue retention from a year ago.
Brad Sills -- Bank of America Securities -- Analyst
Great. Thanks, Bill.
Bill Ingram -- Chief Financial Officer
Yeah.
Operator
Your next question comes from Pat Walravens from JMP Securities. Your line is open.
Pat Walravens -- JMP Securities -- Analyst
Great. Thank you. One for Scott and then one for Ross and Bill. So, Scott, first, in your prepared remarks you talked about applying some AI-powered tools. What do you mean by that. I mean, AI is sort of broad category, robotic process, automation, machine learning, intelligent assistance. Can you give us some specific examples of something that you think you can do better?
Scott McFarlane -- Chief Executive Officer
Sure. You know -- and I think I've said this in the past, Pat. But what I would like to focus everybody on for AI, for us, I mean, there's just lots of app -- in machine learning, there's lots of applications, because there is things like when you have to go and find tax updates and information. Today we do that in a very manual way. We are on the phone. We're doing research on the computer. We're looking around for where the changes have happened. We're taking information that the state send us and get -- and consolidating all of that. But that can be done way more efficiently with AI. I mean, people that can -- I mean, machines that can go out crawl and look for that information, consolidate that information, test that information and then be able to produce it to a group of people that can audit it and get it out.
So manual becomes only the -- the manual becomes only the auditing function, whereas all of that extra work can and should be done automatically. I mean, the ability to find new content, I mean, that's really the holy grail for us, then to extend that out, and so no, we no longer have to use people to go find all that content that we don't have today. I mean, we can do that in an automated fashion, my goodness, I mean, that is a big boon to gross margin, and it's also a way to accelerate growth because you're able to expand your market in a way faster.
Doing on-boarding, making sure -- taking information that the customers have inside their accounting systems and being able to take that, manipulate that and suggest solutions for them as to where they have nexus or how their products are going to be taxed from a taxability perspective, presenting that to them and then being able to allow them to do it without having to do the manual step in the taking of product codes and mapping it to tax decisions, all of that stuff is so manual. It's a burden for the customer and it's a burden for us in on-boarding. So to the degree that we can take the information that we've got out from -- or the IP that we've got out of Indix and provide it to our customers and us internally, it's a fantastic thing, Pat.
Pat Walravens -- JMP Securities -- Analyst
All right, that's super helpful. Thank you. And so on the CFO front, Ross, congratulations. Bill, thank you for helping guidance for the last four years. So listen, to the extent that you're willing to share it and you might not be, what advice have you given Ross about dealing with investors and analysts like me?
Scott McFarlane -- Chief Executive Officer
That's a good -- that's a great question. That's a good question. I have no idea what they're going to -- how they're going to answer it, but it's a great question.
Bill Ingram -- Chief Financial Officer
Well, I got to give you one, Pat, we didn't prep for that. But we're so fortunate to have Ross here. Scott and I just couldn't be more pleased. Ross is going to be great, super smart, very high integrity. And so, I think you'll find working with Ross just outstanding. So he doesn't need my advice, but I'll give him all the support and encouragement that I can. Ross, over to you.
Ross Tennenbaum -- Executive Vice President of Strategic Initiatives
Yes. The number one piece of advice he's given me is big market, low churn. So I hang to that. But I'd say, now having about six years working with the company externally and leading the company through the IPO, and now here for a year, I really -- I joined the company really believing in the long-term, the long-term opportunity we have. And it's been really a great plan that Bill and Scott have put into place in terms of the transition. Spending a year operating several of our important businesses that are important growth areas for the company and really getting deeply immersed into the business, how it operates, working with the whole team and working with Bill, alongside Bill from an operating, me being the operator, he being the financial leader and his great team, and now as we spend hours a day together and deeply immersed myself in the financial operation.
I'll just say, overall, there has been a lot of wisdom and advice and I'm thankful that Bill will continue on as a Board member, so I will continue to have his advice and tutelage. So it's not any one thing, but it's a smart transition that Bill and Scott have factored here and I'm appreciative of it.
Scott McFarlane -- Chief Executive Officer
Pat, this is Scott. What I would say is, I mean, this is something that I really believe in deeply in the business. We have all the new executives, and I say the same thing to everybody joining the company, because the tendency for people is, is to jump in and want to do everything right away. And my advice to all the new leaders we've had here is, take your time, you'll never get this opportunity again. And Bill and Ross have been doing this and Ross did it for a year is learn the business, learn the business, understand the customers, understand how we operate and then once you do that, then you are ready to take on the job. So that's the same for Ross as it is for Amit, as it is for Salim and all of the other people. Learn our business. It's complicated, it's hard, I mean, demo the product, be able to do that and then from that you can just really be effective in your jobs.
Pat Walravens -- JMP Securities -- Analyst
Thank you all for those perspectives.
Operator
Your next question comes from Brad Reback from Stifel. Your line is open.
Brad Reback -- Stifel -- Analyst
Great. Thanks very much. Bill, would you be willing to sort of help us out and maybe point to when you think gross margins will bottom?
Bill Ingram -- Chief Financial Officer
Well, I can't really do that, Brad. But what I can say is, we've got our hands on the controls and we're really taking -- probably heard me say this, we're really taking a very manual process. This process of kind of tax compliance, and as Scott says, it's pretty funny. It hasn't been around for decades. It's been around for thousands of years, and so we're taking this very, very manual process and we're really automating it for the first time at least in a cloud solution.
And so as a result, there's a lot of friction to that automation. We've talked about it, Scott talked about it on a question earlier. And so I'm just very confident that over time, I emphasize time, you'll see nice solid margin improvement here, but I can't say when that's going to be and I wouldn't focus on any near-term quarters, because we're, again, we're taking this manual process, we're automating an industry, a market that has never done this before, it's still very much internal status quo. And as we do these numerous things across the business, I'm confident we will see steady, gradual and inevitable gross margin expansion. And then on the operating margin lines, I think we'll see a really reasonable improvement there just due to scale because we have such a long steady growth opportunity ahead of us.
Brad Reback -- Stifel -- Analyst
Great. Thanks very much.
Operator
Your next question comes from Scott Berg from Needham. Your line is open.
Scott Berg -- Needham -- Analyst
Hi, Scott, Bill and Ross, congrats on a good quarter and thanks for taking my questions. I guess, Bill, good luck in the next adventure, and I guess, this technically makes you Scott's new boss, is that correct?
Bill Ingram -- Chief Financial Officer
Oh, we like that.
Brad Reback -- Stifel -- Analyst
And on the Board?
Scott McFarlane -- Chief Executive Officer
And don't think I haven't heard it.
Scott Berg -- Needham -- Analyst
I guess, there is two questions for me, Scott, let's start on the Indix acquisition. I mean, kind of enamored with that one since you made it because of how, obviously, it could make on-boarding of your customers more quickly given some of the content mapping that you have there. But have you seen any maybe change in competitive win rates or opportunities that are out in the end-market today, specifically based on that functionality?
Scott McFarlane -- Chief Executive Officer
So, I mean, I'm enamored with it as well and I think it's a real game changer. I think Bill said it, I've said it. I mean, I think it's a big game changer for Avalara and for our customers. And we have not rolled it out yet, and I think I said that in the opening remarks that we're just very, very close to do -- I mean, doing that. So we have high hopes that it will provide the kind of customer service that we really want and the efficiencies around that in the quarters to come. So stay tuned on that one because I think it's important for us.
Scott Berg -- Needham -- Analyst
Great. And then from a follow-up perspective probably for Bill or for Ross is, you've had nice core customer growth over the last four, five quarters, nice increase in acceleration there, but can you comment on customer ARPU trends maybe of some of those new customers that are coming into the Avalara ecosystem over the last year relative to maybe that 12 or 24 month timeframe before that?
Bill Ingram -- Chief Financial Officer
Yeah. Sure, this is Bill. I'll take it, Scott, and thanks for your kind comments. We are seeing again on the margin slightly larger deals coming through. I don't want to overemphasize that fact, but with the base now of over 11,000 core customers, they are ticking up and you can kind of do the math and we did the math last year at our Analyst Day. But you're seeing -- you're not seeing any degradation in ARPU, I guess, is what I should say. You're seeing a nice, steady kind of upticks in that average revenue per core customer. And so if it was only a few hundred core customers, it would be probably more significant, but because of our base and the size of that group and the size of opportunity we're going after, you can assume there is a slight uptick in average revenue per core customer, that is going on and the new deals coming in are slightly bigger.
Operator
Your next question comes from Richard Davis from Canaccord. Your line is open.
Richard Davis -- Canaccord Genuity -- Analyst
Hey, thanks. Look, we all know that hiring is a challenge these days for companies and so you guys have done it. We've also seen more acquihires, I mean, I think the -- whatever, partway was according to our guys and Toronto was, I don't know, 80 or 100 employees. But how do you -- is there a ratio, I'm always been wondering when you're a company, is there a ratio as to how you think about whether you buy a company on an acquihire basis, is it dollars per employee or versus hiring, because there's two different paths and stuff like that. I'm just curious as you kind of go forward, how you guys think about that? Thanks.
Scott McFarlane -- Chief Executive Officer
Interesting -- I mean, Richard, thanks. So a interesting question. So I -- I said this in the past, I mean, one of the really -- I think one of the key success aspects of Avalara has been our willingness to make tuck-in acquisitions. I mean, I don't think Avalara would be where it is without doing that, because it's for us in the beginning was always about catching up, it was about getting IP and that was around rates and rules and content for the most part, but meant -- but some of them were actually around getting people and technology in a combination.
And so, for us we have a bias toward let's do what we do really, really well internally and when we need to learn something where we don't have it internally, we always turn to the outside. I mean, we will -- I can just say this with a lot of certainty, we will not, I mean, enter China with just doing it without -- with just our people. We will look to make an acquisition, we will look for the technology and the expertise to enter those markets and that's what we really do.
I mean, we start out with a bias toward action and getting that information, and obviously, we do the comparison. We're always looking at what would it cost us to build it internally, compared to what we can do externally and the speed at which you do. So I don't think you can -- I think everybody would say that what I just said, but I think the difference and what I think is sort of distinguishes us is our bias toward action and making it happen through, and -- as you say, an acquihire. We really do like that methodology and I think we'll continue to do that.
Richard Davis -- Canaccord Genuity -- Analyst
Thank you very much. I'm all set, but I appreciate it. Good quarter.
Operator
Your next question comes from Alex Sklar from Raymond James. Your line is open.
Alex Sklar -- Raymond James -- Analyst
Yead. Thanks. I have two questions on international. First, you added the new SVP of International last month and I think in the release and then again today you talked about his role in shaping the company's go-to-market strategy there. I know it's only been a month, but can you just talk about any early results or any changes that you're looking to make there?
Greg McDowell -- Investor Relations
Sure. Thanks, Alex. I mean, what I'll say is, I'll just do a little bit walk down memory lane to begin with. But when we decided to do this move internationally, I mean, I took one of our senior executives, Marshal Kushniruk, moved him -- moved him to Europe and that's how we started to develop our strategy. It's what drove us to make the acquisitions that we've done there.
Pascal Van Dooren, who has worked with us for a long time had international, and when he stepped aside, it left his vacancy which we filled with Salim. So, we've had I think a very sort of strategic way of saying, hey we have to enter Brazil because that's the world's most complex area and it really drives what happens in LATAM and then obviously EMEA and the EU. I mean, we have to -- we had to cover those.
And I think we had a really great strategy around going to market in those areas. But what -- when I say and your question really is around, I mean, Salim is going to say how do we move out of those and how do we take advantage of India, I mean, more in Asia, how do we enter these other markets that we're not in today and which ones should we go first, which ones should we go second and third, how do we actually think about our moat strategy internationally, so we develop that moat internationally the same way we've been able to develop it in the US. I think that that's really the thing that I'm looking to Amit and then -- and Salim to drive for us.
Alex Sklar -- Raymond James -- Analyst
Got it. That makes sense. I guess just following up on that, international revenues kind of held steady this year so far at about 6% of revenue, did that tick up at all in fourth quarter and then -- and with that and kind of how you just answered the last part, do you think we're far enough through the investments internationally that we could see an inflection in that growth rate where it kind of grows faster than the blended average?
Bill Ingram -- Chief Financial Officer
Thanks, Alex. It's Bill. Yeah. We reported international pretty -- stays a percent, but you got to remember how well we've done overall in the US. And so, what we like to say, what I'd say is, there are certain fundamental building blocks you got to get into place before you're going to see any sort of change in the revenue profile and we're putting those building blocks in place.
Remember, this company was founded 15 years ago and there were many, many years of investment, development and effort, but those things are now also being duplicated certainly at a faster rate internationally. But when international revenue gets over 10% of our total, our plan is to start breaking it out at that point. So we're not quite there yet, but we're very pleased with what's going on in international, we're investing in international, we've talked about our investment there. We're seeing similar tailwinds and demands internationally. And so we think the international marketplaces presents a very, very compelling long-term opportunity for the company.
Scott McFarlane -- Chief Executive Officer
Yeah. I mean, every -- we -- everybody knows how sort of excited I'm and I think the company is for that. And Bill has talked about this in the past, it's really a growing area for us. It's a strong, strong growing area for us. It's just growing on a small base. And the good news is, is that the big base is growing pretty fast as well. It's just hard to -- it's hard to get out in front of that big number, but it is one of our really good growth areas and we're pleased with where we are.
Operator
Your next question comes from Brent Bracelin from Piper Sandler. Your line is open.
Brent Bracelin -- Piper Jaffray -- Analyst
Thanks for taking the question. Top of the hour here. I guess I'll echo the well-wishes for Bill's retirement here. First question is for Scott here and I have a follow-up for Bill or Ross. Scott, tax regulation has and continues to be a tailwind to the business, tailwind to kind of automating the complexity. The latest kind of regulation was the marketplace facilitator law that kind of went into place in Q4. What did you learn in the quarter around that new regulation and what are some of the -- what's been some of the early feedback from some of those marketplace facilitators? And again, one quick follow-up for the CFO team here?
Scott McFarlane -- Chief Executive Officer
Hey, Brent, thanks a bunch. I mean, I think what you're seeing in the market -- in the marketplace act, I mean, what -- I mean, it's -- I think it's a reflection of what's just happening in tax around the world. It's, I mean, Wayfair marketplace, all of the efforts that the rest of the world is putting into VAT reporting, live reporting, those are all just fantastic awareness tailwinds for us. But what I think I've learned about this as much, it's -- that they are alway -- that they are always there and they are always creating complexity. I mean -- and in this one case complexity is our friend, and it's not one thing, it's the culmination of all of those things that I think are driving to what I've always said that this is inevitable. And I mean, specifically, around marketplaces, it's -- it became easier in one sense, but way more complex for the customers because if they're doing something on their e-commerce -- their own e-commerce site, then they have to report everything just as if nothing changed.
And so deciphering what they have to report and what they don't have to report because it's already been done is really actually more difficult than what they had before. And so we're starting -- I mean, we see that in conversations throughout the -- our discussions throughout the chain around marketplaces, the marketplaces themselves, the customers that they're dealing with. So it's hard to say which one is exactly pushing them along, but the whole concept of sales tax, I mean, I think everybody is getting more and more aware of what they have to do and the difficulty around it.
Brent Bracelin -- Piper Jaffray -- Analyst
Got it. Helpful color. And then as I think Bill or Ross, as I just think about the two components of the business, the core customer cohort, that's a $300 million business growing pretty consistently in that low 30% range. The remaining cohort or kind of non-core or smaller customer cohort, that smaller 20% of the business, $76 million business, but growing much faster over 80% growth year-over-year this year. As you think about that cohort, that faster growing cohort are -- these are -- I assume these are smaller kind of deal revenue sizes. Is there an opportunity to kind of upsell those smaller customers, convert them into core customer cohorts, walk me through just the puts and takes, the growth levers in that smaller but fast growing part of the business today?
Bill Ingram -- Chief Financial Officer
Sure, Brent, I don't want to kind of reconcile your math. But we see a lot of opportunity, as I've always described in the mid-market in the United States, we identify historic 400,000, 500,000 mid-market customers, but in that fewer than 20 employees segment of the marketplace, which are the small -- smaller merchants, there's over five million registered businesses in the United States. And so to your point this long tail of smaller merchants we think -- while further out for us is very, very significant. I know we've got some great executives here like Amit and Jay and others that are very familiar with that marketplace from their days at PayPal and other companies. And so in terms of upsell and add-on and so on and so forth, again, the core customer metric as you know, this $3,000 number, if we sign up a new customer at $3,600 a year, well, they're not a core customer until month 10, but if we sign up a new customer at $36,000 a year, they are a core customer in month one.
And so we're going after both segments very aggressively. We're obviously very, I believe, like I say, we've been successful with kind of the mid-market segment of which there's still hundreds of thousands of potential customers out there. But in the smaller segment of which the volume is much larger, we're going to do lots of things and we're making very significant investments in that area to approach those. But it kind of goes to something Scott said, that needs to be much more automated, it needs to be much more self-served, it needs to be much lower friction. And again back kind of my premise about, we're so early in the adoption cycle here. We think as we solve those speed bumps or friction points or hurdles, we think that will open up opportunities for us in this large smaller customer segment. Not only to get them to use our service, but then to sell them more things.
Operator
[Operator Instructions] Your next question comes from Bhavan Suri from William Blair. Your line is open.
Bhavan Suri -- William Blair -- Analyst
Hey, guys. Nice job and thanks for taking my question. Really the last one here, so I'll keep it brief. I just want to touch on the competitive environment, any changes from the lower-end players or the higher-end players? And then just really as you think about the idea of automation, you might took something like a Wolters Kluwer. There's a lot of sort of manual stuff that's done there, integration, process flow, etc, workflow for the large customers. As you guys do more and more automation, does that move up market become just more natural and obvious or is there a limit at which you think because of the deep citizen relationships some of the strategic guys might have there that sort of limits you in that market? Thanks.
Scott McFarlane -- Chief Executive Officer
Bhavan, thank you. This -- your last part of the question I think is probably the more difficult aspect of it. And I guess that's what I'll probably focus is our -- because our competition really hasn't changed. I mean in the beginning it's always status quo, that's what we're fighting against. And I would say the only change that we've had there is are the tailwinds that we've talked about I think are beneficial for awareness. And I think that is changing and the more things that happen is pushing us along.
But the competition that's out there at the low end and at the higher end, they're doing what they're doing and they would love to trade places with Avalara and the moat that we've created around content and around our partner relationships. But because of things like adding cross-border and all of the things that we do internationally just makes it exceedingly difficult for people to break into that moat. But they are definitely pushing and the tailwinds help raises all boats, right? So they're out there.
But like I said, the last part of your question, streamlining workflow and all of that, it goes to actually what I was saying in my opening comments. Yes, we started out in calculation and yes we're doing returns, but there are a great deal of things that you can do beyond that. And which ones those are, not going to comment on now, but as we move up market in the enterprise space, I mean, there'll be lots of opportunity for us to add products around workflow and the things like that. It'll just be natural for us to do that.
But having said that, our big focus is that mid-market. I mean, we are moving upstream. You see it all the time. We're protecting the low-end, but the mid-market is what we're really focused on. So most of our effort is going to be into doing -- into be doing products and initiatives around the mid-market, which would not include some of the things that you were talking about. We'll let Wolters Kluwer continue to do that.
Bhavan Suri -- William Blair -- Analyst
I appreciate the color. Thank you, guys. And nice job. Thanks for taking my question.
Scott McFarlane -- Chief Executive Officer
Thanks, Bhavan.
Operator
Your next question comes from Terry Kiwala from First Analysis. Your line is open.
Terry Kiwala -- First Analysis -- Analyst
Hey, good afternoon. And congratulations, Bill, it's been a pleasure working with you. But one question for Scott about -- Scott, you've talked about automation and how it's benefiting your customer base. I'm wondering if you are seeing any signs on a state-by-state or municipal level of any signs of automation for states to crack down on non-compliant remote sellers, if there's any technologies that's either using themselves coordinating with each other to speed the compliance and the actual filing of returns?
Scott McFarlane -- Chief Executive Officer
Terry, thanks. I've made mention to this in the past and I think it's notable. So the direct answer to your question is, no, they're not that sophisticated yet. But yes, they want to be that sophisticated and they will do it. And they will start using digital methodologies like looking at customers' bank -- e-commerce transactions and credit card, I mean, credit card transactions. So they may not know what's happening in retail when cash is done, they may not know what's happening when checks are done, but when credit cards are done, they can get that information just like everybody else. And they'll start to look at customers as to what are they doing and are they over their thresholds.
And so already you're starting to see some states being organized around trying to find that data and then send out notices to customers to saying, hey, you are approaching the threshold or we see you go over the threshold, you need to take a look at that. But that's all that they're doing right now. They're not -- they haven't been able to get that OK, from here this is what you need to do. And, I mean for me, it would be fantastic as they said let's contact Avalara, get you registered and collected and the like. But we still haven't gotten there yet, but don't think we're not trying.
Terry Kiwala -- First Analysis -- Analyst
Great. Thank you. Your next question comes from Siti Panigrahi from Mizuho. Your line is open.
Sitikantha Panigrahi -- Mizuho -- Analyst
Siti Panigrahi. Okay. Bill, pleasure working with you and Ross, congratulation and looking forward to working with you. Just a follow-up to the marketplace facilitator laws. Last quarter I think you guys talked about 16 partners from a potential of 200 market players. Just wondering any update on that on having more partners? And the second one on that, I guess, is the marketplace facilitator laws that went effective last quarter and eBay talked about this six months impact to the GMV due to collecting sales taxes. So I'm wondering, they are one of their partner and I guess, it should help, I'm wondering, is that from 2020, is that -- any update on that will be great?
Scott McFarlane -- Chief Executive Officer
It's a good question. And I don't think that we talk about partners each and every call, but our business development team, it's -- for us it's the pointy end of the spear. And that's been sort of Avalara's bread and butter. I mean, that's what we're really good at going out and doing, and the team is out talking to every -- everyone that you mentioned on that list, trying to get -- to trying to help them solve this problem. And, I mean, it is driving lots of conversations. And as they become more and more firm, we'll be able to report on that, but what I can report on, it is a big initiative for us in 2020 to continue to drive our partnerships deep into the marketplaces, both domestically and internationally.
Operator
We have no further questions. I'll now turn the call over to Scott McFarlane, Co-Founder and CEO for closing remarks.
Scott McFarlane -- Chief Executive Officer
Sure. Thank you. I want to close by saying thank you to our employees, customers and partners for what was an ambitious and exciting 2019. With renewed commitment to our goals and expanded vision, I'm excited about the work ahead of us in 2020 and beyond. Thank you for your interest in Avalara and we look forward to our next call with you all. And congratulations to Bill, it's been a fantastic journey, couldn't have done it without you, and Ross really excited to work with you in the future. Thank you all.
Operator
[Operator Closing Remarks]
Duration: 74 minutes
Call participants:
Greg McDowell -- Investor Relations
Scott McFarlane -- Chief Executive Officer
Bill Ingram -- Chief Financial Officer
Ross Tennenbaum -- Executive Vice President of Strategic Initiatives
Christopher Merwin -- Goldman Sachs -- Analyst
Sterling Auty -- JP Morgan -- Analyst
Brad Sills -- Bank of America Securities -- Analyst
Pat Walravens -- JMP Securities -- Analyst
Brad Reback -- Stifel -- Analyst
Scott Berg -- Needham -- Analyst
Richard Davis -- Canaccord Genuity -- Analyst
Alex Sklar -- Raymond James -- Analyst
Brent Bracelin -- Piper Jaffray -- Analyst
Bhavan Suri -- William Blair -- Analyst
Terry Kiwala -- First Analysis -- Analyst
Sitikantha Panigrahi -- Mizuho -- Analyst
